Economics 2281 · O Level · The factors of production
The factors of production — practice question
During recent years, the quantity of Latvia’s factors of production has altered. Since 2008, its capital has risen and its land has not altered much, but its labour force and its enterprise have fallen. Enterprise and conditions of supply may influence firms’ prices. In 2022, the Latvian Government raised the country’s national minimum wage (NMW). Even so, its NMW remained one of the lowest in the European Union.
(a)[2]
Identify the rewards earned by capital and land.
(b)[4]
Explain two causes of a fall in enterprise within an economy.
(c)[6]
Analyse how shifts in conditions of supply can influence a firm’s prices.
(d)[8]
Discuss whether or not a rise in a national minimum wage will damage an economy.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Interest, the reward for capital” …